© 2018

Trust and Crisis Management in the European Union

An Institutionalist Account of Success and Failure in Program Countries

  • Provides a single theoretical approach rather than a collection of chapters;

  • Focuses on EU crisis management both in the Eurozone and outside in a strictly comparative manner;

  • Goes beyond economic explanations and provides a novel theory for success and failure


About this book


This book addresses and explains the divergent economic and political outcomes of the financial crisis in the eight European Union member states which needed a bailout program: Cyprus, Greece, Hungary, Ireland, Latvia, Portugal, Romania and Spain. Looking at crisis management as a series of relationships where cooperation is essential, this book focuses on the essential role of trust during the process. It argues that the presence or absence of trust during the negotiation and implementation of the bailout program leads to self-reinforcing cycles of success and failure. The analysis of these eight countries also explores the institutional sources of trust – it shows that a commitment to limited government is associated with both economic success and resistance to populism. The final chapter considers the implications for the future of the EU and calls attention to the importance of strengthening domestic institutions in order to bridge the gap between concerns over moral hazard and expectations of solidarity.


European financial crisis Market actors Austerity cycles Kindlebergerian approach Moral hazard European governance Hungary Latvia Portugal Romania Spain Cyprus Ireland Greece

Authors and affiliations

  1. 1.Péter Pázmány Catholic University Corvinus University of BudapestBudapestHungary

About the authors

Dóra Győrffy is Professor of international political economy at the Péter Pázmány Catholic University and the Corvinus University of Budapest, Hungary. She holds a BA in Government from Harvard University, an MA and PhD in International Relations from Central European University and a Doctor of Science degree in Economics from the Hungarian Academy of Sciences.

Győrffy’s publications address fiscal consolidation and reforms, European monetary integration and financial crises. Her articles have appeared in English and Hungarian including in Acta Oeconomica, Hungarian Economic Review, Europe-Asia Studies, Post-Communist Economies, Society and Economy, and Zeitschrift für Staats-und Europawissenschaften. She is author of two books: Democracy and Deficits: The New Political Economy of Fiscal Management Reforms (2007) and Institutional Trust and Economic Policy: Lessons from the History of the Euro (2013). 

Bibliographic information

Industry Sectors
Finance, Business & Banking


“This volume represents a timely and courageous attempt at disentangling a maze of economic, social and political factors that shaped the recent stabilization programs undertaken in eight crisis-hit EU member countries. The author navigates beyond the boundaries of political economy by highlighting the role of trust and institutions and the ensuing populist backlash.” (George Kopits, Member, Public Finance Council, Portugal, and Visiting Professor, Central European University, Hungary)